Wednesday, July 04, 2012

PNG economy to grow strongly over medium-term

By MALUM NALU

THE PNG economy is expected to grow strongly over the medium term,
according to Treasury acting assistant secretary – forecasting branch
Nancy Lelang, The National reports.
She told the monthly economic and public sector programme seminar at the
Holiday Inn last Friday that in putting together PNG’s fiscal outlook,
Department of Treasury formulated projections for government’s total
revenue, grants, total expenditures, recurrent expenditures and
development budget expenditures.
“Over the medium term 2013 to 2016, government revenue is expected to
remain fairly stable, largely because of stable non mineral revenue
offsetting the variations in mineral revenue over the medium term,”
Lelang said.

Fresh vegetables on sale at Leron in the Markham Valley of Morobe province last month.-Nationalpic by MALUM NALU

“Government’s expenditure is expected to stabilise over the medium term in line with the projected revenue outlook
“Expenditure will be focused on government’s medium term development
plan (MTPD) priority areas of health, education, law and order, and
transport infrastructure.”
She predicted:

The PNG economy is expected to grow strongly over the medium term;

The outlook for government’s total revenue is to remain stable over the medium term;

In contrast, mining revenues are varying over the medium term.
Mining revenue is likely to decline reflective of the closure of Ok Tedi
mine in 2015;

The first lot of the PNG LNG project dividends is expected in 2015.
These are sufficient to replace the Ok Tedi mine and the depleted oil
field revenues to support government expenditure;

Government expenditure is expected to be stable in line with projected revenue over the medium term;

Government debt is expected to be in line with the medium term debt strategy of 30% of gross domestic product;

The new medium term fiscal strategy (MTFS) will be framed in light of expected low mineral revenues; and

Over the medium term, the mechanisms to be used to promote PNG’s
development is through macroeconomic policies, Industry reviews and
reforms, prudent public debt management, and through the usual annual
budgetary allocations

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